Correlation Between Surge Copper and C3 Metals

Can any of the company-specific risk be diversified away by investing in both Surge Copper and C3 Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Surge Copper and C3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Surge Copper Corp and C3 Metals, you can compare the effects of market volatilities on Surge Copper and C3 Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Surge Copper with a short position of C3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Copper and C3 Metals.

Diversification Opportunities for Surge Copper and C3 Metals

0.18

Correlation Coefficient

Surge Copper  C3 Metals

Average diversification

The 3 months correlation between Surge and CCCM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and C3 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Metals and Surge Copper is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Surge Copper Corp are associated (or correlated) with C3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Metals has no effect on the direction of Surge Copper i.e., Surge Copper and C3 Metals go up and down completely randomly.

Pair Corralation between Surge Copper and C3 Metals

Assuming the 90 days trading horizon Surge Copper is expected to generate 3.57 times less return on investment than C3 Metals. In addition to that, Surge Copper is 1.06 times more volatile than C3 Metals. It trades about 0.07 of its total potential returns per unit of risk. C3 Metals is currently generating about 0.26 per unit of volatility. If you would invest  25.00  in C3 Metals on December 28, 2024 and sell it today you would earn a total of  39.00  from holding C3 Metals or generate 156.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Surge Copper Corp  vs.  C3 Metals

Surge Copper Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Copper Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Surge Copper showed solid returns over the last few months and may actually be approaching a breakup point.

C3 Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in C3 Metals are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, C3 Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surge Copper and C3 Metals

The main advantage of trading using opposite Surge Copper and C3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Copper position performs unexpectedly, C3 Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in C3 Metals will offset losses from the drop in C3 Metals' long position.

The idea behind Surge Copper Corp and C3 Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.